REG - PCI-PAL PLC - Final Results <Origin Href="QuoteRef">PCIPP.L</Origin> - Part 2
11/09/2017 07:08
- Part 2: For the preceding part double click ID:nRSK3023Qa
£000s £000s
PCI PAL development - -
CallScripter internal salaries 1,084 1,084
Cost at 1 July 2016 1,084 1,084
Goodwill
PCI PAL development 495 495
CallScripter internal salaries - -
Additions 495 495
PCI PAL development - -
CallScripter internal salaries (1,084) (1,084)
Discontinued Operations Sale (1,084) (1,084)
PCI PAL development 495 495
CallScripter internal salaries - -
Cost at 30 June 2017 495 495
2017 Capitalised development Costs Total
£000s £000s
Amortisation and impairment (included within administrative expenses):
PCI PAL development - -
CallScripter internal salaries 1,084 1,084
Amortisation at 1 July 2016 1,084 1,084
PCI PAL development - -
CallScripter internal salaries - -
Charge in year - -
PCI PAL development - -
CallScripter internal salaries (1,084) (1,084)
Discontinued Operations Sale (1,084) (1,084)
Goodwill - -
PCI PAL development - -
CallScripter internal salaries - -
Amortisation at 30 June 2017 - -
Net book amount
PCI PAL development 495 495
CallScripter internal salaries - -
Net book amount at 30 June 2017 495 495
2016 Capitalised development costs Total
£000s £000s
Cost
Ancora brand - -
Ancora client relationships - -
CallScripter internal salaries 1,084 1,084
Cost at 1 July 2015 1,084 1,084
Ancora brand - -
Ancora client relationships - -
CallScripter internal salaries 1,084 1,084
Cost at 30 June 2016 1,084 1,084
2016 Capitalised Total
development costs
£000s £000s
Amortisation(included within administrativeexpenses):
Ancora brand - -
Ancora client relationships - -
CallScripter internal salaries 1,084 1,084
Amortisation at 1 July 2015 1,084 1,084
Ancora brand - -
Ancora client relationships - -
CallScripter internal salaries 1,084 1,084
Amortisation at 30 June 2016 1,084 1,084
Ancora brand - -
Ancora client relationships - -
CallScripter internal salaries - -
Net book amount at 30 June 2016 - -
13. PLANT AND EQUIPMENT2017 Plant£000s Motor Fixtures and Fittings £000s Computer Equipment£000s Total£000s
Vehicles£000s
Cost:
At 1 July 2016 25 59 410 611 1,105
Additions - - 20 88 108
Disposals - - - - -
Discontinued Operations Sale (25) (59) (410) (540) (1034)
At 30 June 2017 - - 20 159 179
Depreciation (included within administrative expenses):
At 1 July 2016 14 52 371 417 854
Charge for the year - - 3 20 23
Disposals - - - - -
Discontinued Operations Sale (14) (52) (371) (360) (854)
At 30 June 2017 - - 3 77 80
Net book amount - - 17 82 99
at 30 June 2017
Fixtures
2016 Motor and Computer
Plant Vehicles Fittings Equipment Total
£000s £000s £000s £000s £000s
At 1 July 2015 25 59 423 511 1,018
Additions - - 20 162 182
Disposals - - (33) (62) (95)
At 30 June 2016 25 59 410 611 1,105
Depreciation (included within administrative expenses):
At 1 July 2015 10 47 370 367 794
Charge for the year 4 5 34 111 154
Disposals - - (33) (62) (95)
At 30 June 2016 14 52 371 416 853
Net book amount 11 7 39 195 252
at 30 June 2016
Included within the net book amount of £99,000 (2016: £252,000) is £nil (2016: £98,000) relating to assets held under
finance leases. The depreciation charged to the financial statements in the year in respect of such assets amounted to £nil
(2016: £41,000).
14. LAND AND BUILDINGS
2017 Land Buildings Total
£000s £000s £000s
Cost:
At 1 July 2016 428 1,251 1,679
Additions - - -
Disposals - - -
Discontinued Operations Sale (428) (1,251) (1,679)
At 30 June 2017 - - -
Depreciation (Included within administrative expenses):
At 1 July 2016 - 78 78
Charge for the year - - -
Disposals - - -
Discontinued Operations Sale - (78) (78)
At 30 June 2017 - 78 78
Net book amount - - -
at 30 June 2017
2016 Land Buildings Total
£000s £000s £000s
Cost:
At 1 July 2015 428 1,251 1,679
Additions - - -
Disposals - - -
At 30 June 2016 428 1,251 1,679
Depreciation (Included within administrative expenses):
At 1 July 2015 - 25 25
Charge for the year - 53 53
Disposals - - -
At 30 June 2016 - 78 78
Net book amount 428 1,173 1,601
at 30 June 2016
15. TRADE AND OTHER RECEIVABLES 2017£000s 2016£000s
Trade receivables 488 1,266
Other receivables 38 -
Loan notes receivable within one year 945 -
Prepayments and accrued income 82 217
Trade and other receivables due within one year 1,553 1,483
Loan notes receivable in more than one year 2,202 -
Trade and other receivables 3,755 1,483
All amounts are considered to be approximately equal to the carrying value. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of receivables mentioned above. The Group holds £nil (2016: £12,934) of
deposits as security against certain accounts.
Trade receivables have been reviewed for indicators of impairment and a provision has been recorded as follows:
2017 2016
£000s £000s
Opening provision 23 13
Discontinued Operation release (15) -
Charged to income 7 10
Closing provision at 30 June 15 23
All of the impaired trade receivables are past due at the reporting dates. In addition, some of the non-impaired trade
receivables are past due at the reporting date:
2017 2016
£000s £000s
0-30 days past due 25 33
30-60 days past due 42 2
Over 60 days past due 30 1
97 36
Amounts which are not impaired, whether past due or not, are considered to be recoverable at their carrying value. Factors
taken into consideration are past experience of collecting debts from those customers, plus evidence of post year end
collection.
Loan notes receivable
The loan notes receivable will be repaid to the Company as follows: Three annual payments of £957,000 starting on 31st
October 2017 and a final payment of £479,000 on 31st March 2020.
The loan notes do not carry a rate of interest and so have been discounted at a rate of 4% per annum as required by the
accounting standards. As at the 30th June 2017 the values recorded in the balance sheet of the company is as follows:
Loan notes receivable within one year £945,000
Loan notes receivable after one year £2,202,000
As the discounting unwinds, the difference between the initial carrying value and the total amount receivable will be
credited to the statement of consolidated income over the period of the loan notes.
The obligations of the loan notes are secured by a charge over 94.87% of the shares of the Direct Response Contact Centre
Group Ltd being the holding company that acquired the call centre division on the 30 September 2017.
16. 16. CURRENT LIABILITIES 2017£000s 2016£000s
Trade payables 441 289
Social security and other taxes 71 407
Deferred Income 135 -
Other payables 236 304
Trade and other payables 883 1,000
Bank loans (note 17) - 36
Amounts due under finance leases (note 17) - 26
Current portion of long-term borrowings - 62
883 1,062
Amounts due under finance leases are secured on the related assets.
17. 17. NON-CURRENT LIABILITES
2017 2016
£000s £000s
Bank loans - 1,080
Amounts due under finance leases - 67
Long term borrowings - 1,147
Borrowings
Bank loans are repayable as follows:
2017 2016
£000s £000s
Within one year - 36
After one year and within two years - 34
After two years and within five years - 146
Over five years - 900
- 1,116
On 15 January 2016 the Company obtained a loan of £1,145,529, secured over Melford Court, The Havens, Ransomes Europark,
Ipswich IP3 9SJ repayable over 25 years with a 5 year fixed rate of 2.4% above the base rate from the NatWest Bank PLC.
Melford Court was sold in September 2016 as part of the Group Disposal and the loan was repaid in full.
Interest on the bank loan falls due as follows:
2017£000s 2016£000s
Within one year - 32
After one year and within two years - 32
After two years and within five years - 116
Over five years - 256
- 436
Amounts due under finance leases are secured on the related assets.
The minimum lease payments due under finance leases fall due as follows:
2017 2016
£000s £000s
Within one year - 29
After one year and within five years - 71
- 100
The above table includes interest included within the amounts due under finance leases which falls due as follows:
2017 2016
£000s £000s
Within one year - 2
After one year and within five years - 3
- 5
The lease agreements are for various fixed assets and include fixed lease payments with a purchase option at the end of the
lease terms. The agreements are non-cancellable and do not contain any further restrictions. All the lease agreements were
transferred to the discontinued operations.
18. DEFERRED TAXATION
Deferred taxation is calculated at a rate of 17% (2016: 20%)
Tax losses£000s Total£000s
Opening balance at 1 July 2015 - -
(Charged)/credited through the statement of comprehensive income in the year - -
At 30 June 2016 - -
Charged through the statement of - -
comprehensive income in the year
At 30 June 2017 - -
2017 2016
£000s £000s
Unprovided deferred tax assets
Accelerated capital allowances - 36
Trading losses 341 284
341 320
The unprovided deferred tax assets are calculated at a rate of 17% (2016: 18%).
19. GROUP UNDERTAKINGS
At 30 June 2017, the Group included the following subsidiary undertakings, which are included in the consolidated
accounts:
Name Country of Incorporation Class of share capital held Proportion held Nature of business
PCI-PAL (U.K.) Limited England Ordinary 100% Payment Card Industry software services provider
IP3 Telecom Limited England Ordinary 100% Dormant
The Number Experts Limited England Ordinary 100% Dormant
PCI-PAL (U.S.) Inc United States of America Ordinary 100% Dormant
20. SHARE CAPITAL
Group 2017 2017 2016 2016
Number £000s Number £000s
Authorised:
Ordinary shares of 1p each 100,000,000 1,000 100,000,000 1,000
Allotted called up and fully paid:
Ordinary shares of 1p each 31,721,178 317 31,721,178 317
The Group owns 167,229 (2016: 167,229) shares and these are held as Treasury Shares.
During the year, the share price fluctuated between 49 pence and 12.5 pence and closed at 41.5 pence on 30 June 2017.
Share Option schemes
The Company operates an Employee Share Option Scheme. The share options granted under the scheme are subject to
performance criteria and generally have a life of 10 years. During the year two tranches of options were issued.
Grant One on 25 May 2017.
The grant was for 3,065,000 options at an exercise price of 33 pence each. Of the 3,065,000 options issued 925,000 were
issued to various directors of the Company and these are reported as part of the remuneration committee report. The
performance criteria of this grant is as follows: 50% of the options will vest if the share price of the Company as
measured on the London Stock Exchange trades above 44p, being the share price at the date of grant, for a continuous 30 day
period; 25% if the share price of the Company trade above 66p for a continuous 30 day period; and 25% will vest if the
share price of the Company trades above 88 pence for a continuous 30 day period. The options cannot be exercised for
three years from the date of grant and will lapse after a ten-year period if they have not been exercised.
The options have been valued using a Monte Carlo Pricing model with the following assumptions:
Spot price £0.44
Strike price £0.33
Estimated Time to Maturity 5 years
Volatility 20%
Risk Free rate 0.57%
Dividend yield 0.00%
No of Steps 10
No of simulations 100,000
The fair value of the options has been calculated at 14.1 pence and £4,000 has been charged to the statement of
comprehensive income account for this financial year.
Grant Two on 30 June 2017
The grant was for 150,000 options at an exercise price of 41.5 pence each being the share price the date of issue. The
vesting criteria of this grant is as follows: 37,500 Option Shares shall vest and become exercisable on 5 July 2018. Of the
remaining 112,500 options these will vest in equal tranches over the period of 36 months starting 5 August 2018. The
options will lapse if they have not been exercises within a ten-year period from the date of grant.
The options have been valued using a Black Scholes Pricing model with the following assumptions:
Spot price £0.415
Strike price £0.415
Estimated Time to Maturity 5 years
Volatility 20%
Risk Free rate 0.57%
Dividend yield 0.00%
The fair value of the options has been calculated at 7.8 pence and no change has been charged to the statement of
comprehensive income account for this financial year.
An analysis of the Group and Company options as at 30th June 2017 is as follows:
Exercise Price Options Outstanding Options exercisable Weighted average life in years Fair Value of options at date of grant
Grant One 33 Pence 3,065,000 - 4.92 14.3 pence
Grant Two 41.5 Pence 150,000 - 5.00 7.8 pence
The analysis of the Company's option activity for the financial year is as follows:
2017 2016
Weighted Average exercise price Number of Options Weighted Average exercise price Number of Options
£ £
Options outstanding at start of year - 0.01 600,000
Options granted during the year 0.33 3,215,000 -
Options exercised during the year - -
Options lapsed during the year - 0.01 (600,000)
Options outstanding at end of year 0.33 3,215,000 -
Options exercisable at the end of year - -
21. FINANCIAL INSTRUMENTS
The Group uses various financial instruments including cash, trade receivables, trade payables, other payables, loans and
leasing that arise directly from its operations. The main purpose of these financial instruments is to maintain adequate
finance for the Group's operations. The existence of these financial instruments exposes the Group to a number of financial
risks, which are described in detail below. The directors do not consider price risk to be a significant risk. The
directors review and agree policies for managing each of these risks, as summarised below, and these remain unchanged from
previous years.
Capital Management
The capital structure of the Group consists of debt, cash, loans and equity. The Group's objective when managing capital is
to maintain the cash position to protect the future on-going profitable growth which will reflect in shareholder value.
At 30 June 2017, the Group had a closing cash balance of £1,958,116 (2016: £895,422) and an outstanding mortgage of £nil
(2016: £1,109,256).
Financial risk management and objectives
The Group seeks to manage financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to
invest cash assets safely and profitably. The directors achieve this by regularly preparing and reviewing forecasts based
on the trends shown in the monthly management accounts.
Interest rate risk
The total loan balance at 30 June 2017 is £nil (2016: £1,109,256).
Following the disposal, the Group does not use loan or lease finance and so there is no interest rate risk.
Credit risk
The Group's principal financial assets are cash and trade receivables, with the principal credit risk arising from trade
receivables. In order to manage credit risks the Group conducts third party credit reviews on all new clients, takes
deposits where this is deemed necessary and collects payment by direct debit, limiting the exposure to a build-up of a
large outstanding debt.
Liquidity risk
The Group aims to mitigate liquidity risk by closely monitoring cash generation and expenditure. Cash is monitored daily
and forecasts are regularly prepared to ensure that the movements are in line with the directors' strategy.
Trade payables and loans fall due as follows:
Less than One to twoYears Two to fiveyears Over fiveyears Total
one year
2017 £000s £000s £000s £000s £000s
Trade payables 441 - - - 441
Other payables 371 - - - 371
Lease capital - - - - -
and interest
Loans - - - - -
At 30 June 2017 812 - - - 812
Less than One to twoYears Two to fiveyears Over fiveyears Total
one year
2016 £000s £000s £000s £000s £000s
Trade payables 289 - - - 289
Other payables 304 - - - 304
Lease capital 29 29 42 - 100
and interest
Loans 68 65 262 1,156 1,551
At 30 June 2016 690 94 304 1,156 2,244
Foreign currencies
During the year exchange gains of £93 (2015: £11,784) have arisen and at the year--end £655 (2016: £57,333) was held in
foreign currency bank accounts.
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction and monetary
assets and liabilities in foreign currencies are translated at the rates ruling at the year end. At present foreign
exchange is minimal and hedging and risk management is not deemed necessary.
Financial assets by category
Loans and Nonfinancial
receivables assets Total
£000s £000s £000s
2017
Cash at bank 1,958 - 1,958
Trade receivables - current 488 - 488
Other receivables 38 - 38
Loan notes receivable 3,146 - 3,146
Prepayments and accrued income - 82 82
5,630 82 5,712
Loans and Nonfinancial
Receivables assets Total
£000s £000s £000s
2016
Cash at bank 895 - 895
Trade receivables - current 1,266 - 1,266
Other receivables 1 - 1
Prepayments and accrued income - 217 217
2,162 217 2,379
The fair values of loans and receivables are considered to be approximately equal to the carrying values.
Financial liabilities by category
Financial liabilities measured atamortised Nonfinancial
cost liabilities Total
£000s £000s £000s
2017
Trade payables 441 - 441
Accruals 236 - 236
Other payables 135 - 135
VAT and tax payable - 71 71
Loans - - -
Leases - - -
812 71 883
Financial liabilities measured atAmortised NonFinancial
Cost Liabilities Total
£000s £000s £000s
2016
Trade payables 289 - 289
Accruals 291 - 291
Other payables 13 - 13
VAT and tax payable - 407 407
Loans 36 - 36
Leases - 27 27
629 434 1,063
The fair values of financial liabilities are considered to be approximately equal to the carrying values.
22. CAPITAL COMMITMENTS
The Group has no capital commitments at 30 June 2017 or 30 June 2016.
23. CONTINGENT ASSETS
The Group has no contingent assets at 30 June 2017 or 30 June 2016.
24. CONTINGENT LIABILITIES
The Group has no contingent liabilities at 30 June 2017 or 30 June 2016.
25. OPERATING LEASE COMMITMENTS
2017 2016
£000s £000s
Total future lease payments:
Less than one year 98 72
After one and within two years 79 42
After two and within five years 38 61
215 175
Operating lease commitments relate to the following buildings:
London expires March 2019
Ipswich Gamma Terrace expires December 2021, with optional break clause for
September 2019
26. TRANSACTIONS WITH DIRECTORS
There were no transactions with directors in the year to June 2017 or June 2016 other than the dividends noted below.
27. DIVIDENDS
The directors have proposed a dividend of nil pence per share (2016: nil pence per share) post year end (subject to
shareholder approval).
Following receipt of the initial consideration in respect of the Disposal, an interim dividend of 3.16 pence per share was
declared on 9th November 2016 and paid on the 7 December 2016 (2015: nil pence per share).
The following directors received dividend payments during the year to 30 June 2017 as follows:
DividendPaid DividendPaid
2017 2016
£000s £000s
W A Catchpole 85 4
R S M Gordon 33 1
G Forsyth 35 1
28. DISPOSAL OF THE CALL CENTRE DIVISION
On 30 September 2016, the Group disposed of its call centre division, consisting of IPPlus (UK) Ltd, its Ansaback contact
centre, and CallScripter Ltd, its call centre software businesses, for an initial consideration of £6.70 million plus any
working capital adjustments. The initial consideration was paid as £3.35m cash and a loan note of £3.35m (discounted to
£3.15m in the balance sheet) secured over the shareholding of the purchasing directors.
Prior to the disposal, the Group reorganised its assets. The trading division of PCI PAL was sold by IPPlus (UK) Ltd to a
separate subsidiary and excluded from the disposal. The consideration for the PCI PAL division was £300,000.
In addition, the Group sold and leased back its freehold property at Melford Court. The consideration was £1,950,000 plus
VAT and the group recorded a profit of £360,000 on this transaction. The Melford Court lease was disposed of with the
disposal of the Ansaback and CallScripter businesses.
Prior to the disposal IPPlus (UK) Ltd, the owner of the Ansaback and CallScripter businesses, paid a dividend of £909,000
to PCI-PAL PLC.
Revenues and expenses, gains and losses relating to the discontinuance of this division have been eliminated from the loss
from the Group's continuing operations and are shown as a single line item on the face of the Consolidated Statement of
Comprehensive Income.
Operating profit until the date of disposal are summarised below:
2017 £000s 2016 £000s
Revenue 1,845 7,163
Cost of sales (1,414) (5,849)
Gross profit 431 1,314
Administrative expenses (98) (402)
Trading profit 333 912
Profit on sale of property 361 -
Operating profit 694 912
Interest expense (7) (32)
Profit before taxation 687 880
Taxation (33) 99
Profit for the year from discontinued operations 654 979
Profit on disposal 5,443 37
Total Profit for period from discontinued 6,097 1,016
activities
The calculation of the profit on disposal is shown below: £000s
Tangible Assets 216
Current Assets
Trade Debtors 999
Other debtors and prepayments 307
Cash at Bank 914
2,220
Current Liabilities
Trade Creditors (116)
VAT and Tax Payable (832)
Other Payables (393)
(1,341)
Net Assets disposed 1,095
Proceeds of sale
Cash received on signature 3,350
Cash received from final working capital calculation 423
Loan Notes receivable 3,146
Total consideration 6,919
Less: Fees paid (243)
Less: redundancy paid on completion (138)
Net Consideration received 6,538
Profit on disposal 5,443
Cash flow information for the call centre division prior to its disposal:
2017 2016
£000s £000s
Net cash outflow from operating activities (177) 1,080
Net cash generated from investing activities 2,239 (194)
Net cash used in financing activities (1,102) (58)
Net Cash used by disposed operation (858) 828
29. SUBSEQUENT EVENTS
There are no subsequent events that need disclosing.
This information is provided by RNS
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